Residential property prices in Australian capital cities increased by 0.7% in January with growth led by Hobart, Sydney and Melbourne, the latest index shows.
The January rise was lower than the 1.4% recorded in December, but higher than the readings for October and November last year, when capital city dwelling values rose by 0.5% and 0.2% respectively.
Overall every capital city except Darwin recorded a rise in dwelling values over the month with the largest 1.4% in Hobart, 1% in Sydney and 0.8% in Melbourne, according to the data from real estate company CoreLogic.
Quarter on quarter all capital cities saw prices rising with Hobart again seeing the strongest growth at 5.8% over the three months to the end of January, followed by Sydney up 2.7% and Melbourne up 2.4%.
The annual growth rate across the combined capital cities was 10.7% over the 12 months ending January 2017, compared with 10.8% over the previous rolling 12 month period.
Sydney stood out as recording the highest annual capital gains with dwelling values up 16% over the past 12 months, the highest annual rate of growth since the 12 month period ending September 2015. Since the growth cycle commenced in June 2012, Sydney dwelling values have increased by a cumulative 70.5%.
The quarterly capital gain across Hobart was the highest of any capital city at 5.8%, taking the annual capital gain to 7.8%.
‘While the growth trend in smaller cities such as Hobart can show higher levels of volatility, clearly the Hobart housing market is now well into its growth cycle. Strong housing market conditions are being driven by positive affordability of housing, as well as improving economic conditions and stronger migration trends,’ said CoreLogic head of research Tim Lawless.
He pointed out that for Perth and Darwin, the rise in dwelling values over the rolling quarter may hint at a bottoming of the downturn, evident since 2014. ‘Since dwelling values peaked in these markets they have reduced by a cumulative 7.7% in Perth and 7.5% in Darwin through to January 2017. Perth dwelling values were 2.1% higher over the past three months and Darwin values were up 1.8%,’ he explained.
He also pointed out that buyers still have a great deal of leverage in these markets, with listing numbers remaining high, long selling times and high rates of discounting. ‘However, in another indication that conditions may be moving through the bottom of the cycle, transaction volumes moved higher across both markets prior to the seasonal downturn in December and January, whilst the average selling time reduced from previously higher levels,’ said Lawless.
‘With economic and demographic conditions remaining weak in these markets, a recovery in dwelling values is likely to be a slow process,’ he added.
